Nido House View Q1 2021

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House View

House view PBSA Investment Market Outlook, UK & Europe, March 2021

House View – PBSA Investment Market Outlook, UK & Europe, March 2021

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House View

A record

£6bn

in PBSA transactions in the UK in 2020 source Bonard

£

Applications up

3%

in the UK in Sept 2020 &

5% source Bonard

Wellbeing, security & connectivity

1st ask for students in

stable/compressing across all European core cities

2020/21

source Bonard

of students happy with PBSA provider vs 25% in private houseshares

in Government financial support for students

predicted in 2021

< yields 69%

£70m

source Nido

29,000 PBSA beds in the pipeline for 2021 source Knight Frank

source Knight Frank

100% occupancy expected in 2021/2022 academic year source Nido

600,000 international students targeted by UK Govt by 2030

of students want to be in their private accommodation source Nido

the role of Mum and Dad in accommodation decisions in 2021 source Nido

+11,000 new planning applications for PBSA in Q4 2020 houseshares

50%

of students in 2020/2021 offered a discount or incentive source Knight Frank

source Sturents

+5.5%

Rental growth forecast for 2021/2022 source Nido

House View – PBSA Investment Market Outlook, UK & Europe, March 2021

85%

increase in affordability in the UK for students source Knight Frank

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PBSA outlook remains positive Q1 2021 ○ Appetite for PBSA investment remains strong with sizeable portfolios transacted in the UK and Europe already this year and yields stable or compressing across most core cities

Across Europe, all major cities have less than half a bed available per student, with Paris at 16 students per bed, Copenhagen 25 students per bed and Warsaw at 28 students per bed

○ Investors are seeing a W shape recovery for PBSA with a final uplift expected in September 2021

In most European cities, there is an opportunity for developers and investors to plan well-designed high quality operated private student accommodation with Germany in demand in particular. Round Hill Capital and Nido have already acquired two more assets in the country this year and plan to do more

The UK sector remains undersupplied with some construction ○ delays combining with an overall reduction in planning applications contributing to a constricted pipeline

PBSA Investment Market Outlook, ○ Round Hill Capital and Nido continue to expand our portfolios across February 2021Europe in PBSA with new developments and operating schemes in

cycle & as Europe, the ○ There may be further dislocation in the 2021/2022 UK timetable for A level results and places is already confirmed to be delayed, but this augurs well for those PBSA operators who can attract students (and their parents) with a more safe and highquality offer ○ Consumer confidence is riding high post the UK’s successful vaccine roll out – it is expected that this will translate to both domestic and international students ○ Nido’s own research highlights that 85% of students were still planning to move away from the family home for their studies whether learning was online or physical ○ PBSA looks set to benefit from an increase of applicants to Higher Education seeking safer and higher quality accommodation in 2021/2022. The UK saw an overall increase of 3% in 2020 despite other countries such as North America seeing lower levels of applicants ○ Despite lockdown, it is estimated that an average of 50% of students remained in their private accommodation, cementing the need for privately operated residences to remain open and serviced. Operators have noted a steady rise in student occupancy over the last few weeks as sentiment improves across Europe ○ The average student budget has increased 5.5% year on year with 84% of all students saying accommodation was affordable and 69% of private PBSA students feeling satisfied with their operators, compared to just 25% in privately rented house shares ○ The UK Government has put into place a number of measures to support PBSA including a £70m pot for student financial support, the extension of visas for international grads and post-grads staying in the UK after qualification, and a formal target of hosting 600,000 overseas students in the UK by 2030

House View – PBSA Investment Market Outlook, UK & Europe, March 2021

Germany, Denmark, Ireland, Portugal and Spain

Nido remains positive for strong levels of occupancy across its portfolio in 2021/2022, with an expectation for rental growth

Brian Welsh, Head of Student Accommodation at Round Hill Capital, says: “The case for investment in PBSA remains strong and the outlook positive. We are seeing investors accessing the sector whether directly or via funds and institutions as they see the long-term stability of the sector, particularly in the UK, which continues to hold its place in the top global ranks for education. In addition, student demand continues to rise for private PBSA. Our own research tells us that students want to be away from home whether they are learning online or not and, with lockdown easing post Easter, we expect the number of students returning to their residences to rise even further. This, coupled with favourable policies being put in place to attract overseas students and the successful progress of the Covid vaccine roll out to date, means that we are expecting BAU from September 2021 and a strong academic year for investors and operators which will hopefully also mean a top-quality experience for students is delivered.”

For further discussions on PBSA please contact Brian Welsh / Round Hill Capital OR Darren Gardner / Nido COO.

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Further Nido insight The class trend report: fast-forwarding our future - The Best in Class Awards PBSA remains resilient despite Brexit Knight Frank and UCAS 2021 Report Knight Frank flags key trends set to drive resi investment – Property Week UK student accommodation sector could see distress in 2021 – S&P Global market intelligence UK PBSA Index 2020 – CBRE StuRents report widening regional disparity in UK PBSA sector – PBSA News/StuRents StuRents report PBSA sees planning applications crash by 47% Property Reporter / StuRents (January 2021) PBSA operators must provide student-first solution to match soaring demand – Property Investor TODAY Bucking expectations: What 2021 holds for the PBSA sector – Development Finance Today What does 2021 hold for the student market? – Property Investor Today PBSA will be top of asset class – Property Week

House View – PBSA Investment Market Outlook, UK & Europe, March 2021

About Nido student Nido Student has been managing and operating student accommodation across the UK for over a decade. With more than 7,000 operational beds and students from over 100 countries booked into our accommodation across the UK, Germany and Ireland and more developments coming on board in continental Europe, the company has a truly global perspective. As specialist PBSA operators, backed by Round Hill Capital, which itself has a strong residential portfolio and a global presence, our experts on the ground are able to provide trends and forecasts in this long-term structurally supported sector. We know that success and income is driven by the consumer experience and it is important for us to understand what students want, how it differs from country to country and how we embed this into our design and operations to be the best in class, fully occupied and recognised for delivering excellent service and student wellbeing.

Disclaimer This House View is being provided solely for informational purposes to the Recipient and its client(s) and is strictly confidential. This House View does not constitute investment advice and should not be relied upon as such. This House View must not be copied, reproduced, distributed or passed, in whole or in part, to any other person. This House View is not intended for distribution to, or use by any person or entity in any jurisdiction where such distribution or use would be contrary to local law or regulation. This House View should not be used for any other purpose or shown to any other parties apart from the Recipient and its client(s). No representation or warranty, expressed or implied, is or will be made and no responsibility or liability is or will be accepted by Nido Student, Round Hill Capital or any of its respective officers, servants or agents or affiliates as to, or in relation to, the fairness, accuracy or completeness of this House View or the information forming the basis of this disclaimer.

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House View

House view PBSA Investment Market Outlook, UK & Europe, March 2021

House View – PBSA Investment Market Outlook, UK & Europe, March 2021

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